Can the EU and China act together?

Finding new roles in some uncharted territories

Sebastian Bersick is Jean Monnet Professor, Chair on the International Political Economy of East Asia at Ruhr University Bochum, Germany, and Adjunct Professor at the School of International Relations and Public Affairs, Fudan University, Shanghai, China; Shiping Tang is Fudan Distinguished Professor and Dr. Seaker Chan Chair Professor at the School of International Relations and Public Affairs, Fudan University, Shanghai, China; Author of The Social Evolution of International Politics

The post-Second World War and post-Cold War international system is facing some strong headwinds. Europe has been under siege from massive immigration, terrorist attacks, rising populism, a war in Ukraine and, of course, Brexit. The Middle East remains stuck in violence and cold peace without any hopeful signs. Meanwhile, East Asia seems to be adrift without a concrete regional project. Most critically, the United States under Donald Trump seems to be unable and unwilling to act as a responsible stakeholder in global governance anymore.

In this time of upheaval, the European Union and its member states, as well as China, need to find new roles in some uncharted territories. We believe it is high time for the EU and China to move beyond their existing patchy patterns of cooperation and build a more stable and reliable partnership by acting together in some key areas of global governance. Both share an interest in upholding the existing international order. As such, both sides – and the world – will benefit much if the EU and China can act together.

From a European perspective, we are arguably witnessing the most profound structural change since the fall of the Berlin Wall in 1989 and the end of systemic bipolarity in international relations. Most prominently, under Trump, the transatlantic partnership has largely changed from that of a normative community based on values to a functional necessity based on interests. The new US administration’s ideology of ‘America First’ risks a further transatlantic estrangement, if not the partnership’s erosion.

Key leaders within the EU now openly challenge some of Trump’s key approaches. In view of Trump’s bans on travel to the US from many majority-Muslim countries and his rejection of the Paris climate change agreement, Emmanuel Macron, as candidate and French President, has offered home to scientists and entrepreneurs: “I want all those who today embody innovation and excellence in the United States to hear what we say: from now on… you will have a new homeland, France.”

The European Union and China need to find new roles in some uncharted territories

For Germany’s chancellor Angela Merkel, the US under Trump is ceasing to be a reliable partner and Europe can no longer “completely depend” on the US. The so-called West is threatened to disintegrate, taking with it some key institutions that have so far governed the existing international order.

From a Chinese perspective, the time for shouldering more global responsibilities might have come earlier than expected. Fundamentally, China’s economic development depends on the collective goods provided by the existing international order. Yet the existing order is now under duress because the US under Trump is threatening to pull the plug of some key pillars of the order. With so much uncertainty, even the success of China’s two key projects, the Asian Infrastructure Investment Bank (AIIB) and the Belt and Road Initiative (BRI), is not guaranteed.

Unsurprisingly, therefore, when Trump proclaims the merits of protectionism in his inaugural address, Chinese President Xi Jinping, speaking at the World Economic Forum in Davos, not only called for an open economic order but also proclaimed China’s interest to “vigorously foster an external environment of opening-up for common development.”

Although Trump and Xi had a fairly successful informal summit, there is lingering doubt within China’s policy circles about Trump’s reliability as a leader, in addition to the existing worry that Trump may go too far in undermining some of the key pillars of international order. Moreover, many Chinese elites also suspect that the US will be unwilling to accept China as an equal partner, no matter what.

Both the EU and China grasp that their bilateral relationship is now more critical than ever. The EU is China’s biggest trading partner while China is the EU’s second-largest trading partner after the US. In addition, there are a host of issues on which the EU and China share common ground. So as Trump withdrew from the Paris agreement, the EU and China, meeting in Brussels, re-emphasised their resolve to fight climate change.

But it is also apparent that the EU and China cannot patch things up easily. The recent EU-China summit in Brussels made this fact abundantly clear. Because of the EU’s refusal to grant market economy status to China an expected EU-China joint declaration on climate change was not agreed. Instead, the focus during the summit shifted to deep differences between China and the EU. Negotiations on an EU-China investment agreement stalled; the EU continues to deplore limited market access and Chinese dumping, especially in the steel sector. EU Trade Commissioner Cecilia Malmström was critical of Beijing: “The welcome commitments from [China] about liberalisation have not been matched by concrete action”.

There are several concrete measures that the two sides can take

But for China, Brussels’ anti-dumping measures against Chinese products are only exposing the EU’s protectionism towards China. The challenges to a redefinition of China’s and Europe’s role in international relations also became evident in the public debate in Germany surrounding Chinese Premier Li Keqiang’s recent visit to Berlin. Some observers argue for an EU-China partnership in trade and climate change, whereas others emphasise the risk of letting China gain the upper hand.

We believe that the EU and China should work with each other closely to clear the way for a steadier partnership, even if the US comes back from Trumpism. With the US disengaging from global governance and multilateralism in international affairs, Europeans are, for the first time, fundamentally challenged to develop real autonomy and agency. The EU now needs partners other than the US to uphold the international order on which Europe’s prosperity and security depend. On this front, China is an obvious choice. China’s prosperity and security also depends on the stability of the international order.

We believe that there are several concrete measures that the two sides can take.

The upcoming G20 summit in Hamburg in early July will present Europeans, China and other countries with a key opportunity to reject America’s turn towards protectionism and its America First ideology. The Chinese government laid a solid foundation for addressing climate issues within the G20 during the Hangzhou summit last year. To further this process, closer cooperation between Europe and China is now essential, and Europe and China can also send a clear signal against America’s protectionism at the Hamburg summit.

The EU and China can also work together in Africa. For Europe, supporting African peace and development is an investment in its own security and prosperity. Africa is a key component of China’s Belt and Road Initiative. Africa is also a key component in the EU’s 2016 Global Security Strategy. Africa does not only need China’s investment but also China’s experience in economic development.

In this age of uncertainty, both the EU and China will benefit from more long-term strategic thinking when it comes to the other side

So far, Europe has mostly criticised China for neglecting human rights and environmental issues when doing business in Africa. But without working with China and African countries, Europe can be accused of being sour obstructer. So it is time for Europeans and China to compare notes and start coordinating their Africa policies where appropriate. The EU-Africa summit later this year in Brussels provides an opportunity to start a strategic dialogue on how China’s Belt and Road Initiative and the EU’s Africa policy can complement each other.

Finally, the EU and China should also work towards an EU-China Free Trade Agreement. With the Doha Round blocked, an EU-China FTA could become a major project with potentially wide impact and a motor of further Asia-Europe economic integration.

Along the way, the EU and China may also bring the East Asian region, which is now adrift, into a region with a purpose again by facilitating the build-up of regional governance capacity. The 50th anniversary of the Association of Southeast Asian Nations (ASEAN) this August is a great opportunity. The EU has for a long time shown an interest in joining the East Asia Summit (EAS).

As an ASEAN dialogue partner the EU should also participate in the ASEAN Defence Ministers’ Meeting-Plus. If negotiations on an ASEAN-EU Free Trade Agreement are relaunched, as it is expected to happen this year, then the EU could also become in principle eligible to joining the newly-developing Asian trade architecture within the Regional Comprehensive Economic Partnership (RCEP). With President Trump’s decision to exit the Trans Pacific Partnership (TPP), future EU membership of the RCEP would contribute to further strengthening of regional and global trade governance. Next year’s Asia-Europe Meeting (ASEM) summit in Brussels would be an additional opportunity to enhance the capacity for sustainable development and inter-regional governance.

In this age of uncertainty, both the EU and China will benefit from more long-term strategic thinking when it comes to the other side. The world will be more blessed with a steadier EU-China partnership, regardless what happens in Trump’s America.